Centrica buy facing a twin probe

ENERGY giant Centrica today risked a wholesale investigation by the competition authorities of its dominance of the UK gas market, as it announced the £315m acquisition of Britain's single biggest storage facility.

Centrica is buying the Rough gas storage facility located in a disused field under the North Sea which on its own accounts for more than 80% of Britain's storage capacity - a hugely strategic capability as UK gas reserves begin to run low.

The buy will spark an investigation by energy regulator Ofgem and the Office of Fair Trading. Centrica believes it will head off the probes by promising to make at least 70% of the gas stored at Rough available to other UK gas users on 'non-discriminatory terms'.

However, investors fear that as Centrica controls 65% of the retail gas supply market in the UK, the OFT may worry it is trying to rebuild its old British Gas empire which could lead to an investigation of Centrica's position in the UK market, including its Irish Sea production assets.